BANK NOTES OF THE GOVERNMENT OF MALTA John. E. Sandrock Early History The island of Malta is best known for its strategic location. Lying halfway between the Straits of Gibraltar and the Suez Canal, and situated between Sicily in the north and Tunisia in the south, it is in a geographical position to dominate shipping and commerce in the Mediterranean Sea. It is generally believed by historians that Malta was first settled by the Phoenicians about 5200 B.C.; however, all evidence of their civilization has long since disappeared. The Phoenicians were followed by Greek colonizers, whose numerous inscriptions, coins and works of art attest to their presence. Next came the Carthaginians in the 6th century B.C. Carthaginian rule was harsh, so it is not surprising that the native Maltese rebelled when the Romans arrived on the scene in 218 B.C. The Roman emperor Cicero granted the islanders special status within the Roman Empire which included the right to coin their own money and to send ambassadors to Rome. Under this arrangement Malta became prosperous. After the break-up of the Roman Empire, Malta fell to the Arabs. Not being able to garrison the island in sufficient numbers, they in turn were replaced by Norman Sicilians. From this point onward Malta became inextricably tied to Italian interests. After being driven from Palestine and Rhodes by the Turks; the Knights of St. John, crusaders of yore, moved to Malta. There, together with the Maltese people, they survived a great attack by the Turks. The 1565 Maltese victory successfully checked the advance of Muslim power in Western Europe. The rule of the knights ended in 1798 when Napoleon Bonaparte took possession of the islands while en-route to his Egyptian Campaign. During the Napoleonic War most European ports were closed to British shipping. As a result, Malta experienced a commercial boom which lead to “free port” status, whereupon the island became an important trading center for the shipment of British goods to Europe. The defeat of Napoleon at the Nile ended Napoleon's grandiose plan to make Malta a center of French trade. French rule was unpopular. In 1800 Maltese rebels invited the English Royal navy to intercede. This lead to two hundred years as a British crown colony. The coinage of Malta was usually that of the ruling power at the time. The Knights of Malta minted their own money. At the time of British colonization in 1814, Maltese circulating currency was predominantly Sicilian, French and Spanish. From 1824 onwards, British silver and copper became the coinage of Malta. Malta's Commercial Banks English merchants quickly realized the potential for trade once peace was declared. The first bank on the island, the Anglo-Maltese Bank was opened in 1809, soon to be followed by the Banco di Malta. Bank capital was in the form of scudi to accommodate Maltese and Italian traders. At this time the two banks commenced issuing their own notes denominated in scudi. These notes are extreme rarities today. This 10 scudi note was of the first issue of the Banco di Malta . It was engraved with black ink on white paper like the Bank of England notes of the time. St. Paul's escutcheon, a snake entwined with a sword surrounded by palm and olive branches, is seen as the principal vignette. Anglo-Maltese and Banco di Malta notes had no official government standing, were privately financed, and existed only to accommodate the commercial community. Due to the solid management behind them, the notes were very much in demand and widely accepted. A separate currency for Malta was first proposed in 1824. When the British Treasury decided to supply all of its colonies with their own silver, the idea was abandoned. Until 1825 all government accounts were kept in scudi. In that year a proclamation was passed declaring British silver to be legal tender in Malta. It was not until 1851, however, that the Banco di Malta and Anglo-Maltese banks converted to sterling. Both banks then abandoned the scudi notes, denominating all future issues in Maltese lira sterlina. Between 1873 and 1875 their notes were overprinted “Payable in Sicilian Dollars”. to accommodate the vast amount of Sicilian coinage circulating on the island at that time. At first the Banco Anglo Maltese issued their notes in scudi. In 1825 the British government decreed that all future commercial bank issues would be made in lire sterling, which resulted in the issue shown above. Denominations were in 1, 5, 10, 20, 30 and 100 lira sterlina. The notes were printed in black on white watermarked paper. St. George slaying the dragon appears at upper left. A third banking institution for Malta was formed in London in 1886. This bank was known as the Anglo-Egyptian Banking Company. An order for 3,700 notes valued at £8,500 was immediately placed with the printing firm of Bradbury Wilkinson and Company of London. The first issue was dated 1 October, 1886 and remained in circulation until withdrawn in 1891. This was necessitated by a British ordinance which henceforth forbid private banking institutions from issuing their own notes. This action eventually forced the three banks to cease all note issue. Their notes, however, remained in circulation for many years thereafter. The National Bank of Malta, until its dissolution in 1974, continued a provision on its books which allowed for the continued redemption of all three banks' notes. Banco di Malta sterling issues came in denominations of 5, 10, 20, 50 and 100 lire. All were issued between 1851 and 1891. The vignette at upper left is a depiction of St. Paul. All notes were black on white, dated at Valletta with Italian text. The watermark ”Banco di Malta” and value in words appears across the note. This 20 lire note is typical of the type. The Anglo-Egyptian Banking Company commenced issuing notes in Malta in 1886. It was a short- lived institution due to a British decree dated 1891 which withdrew the commercial banks' right to issue notes. Denominations were in pounds sterling. These notes were the product of Bradbury, Wilkinson and Company of London, and bore a likeness of Grandmaster La Vallette with Maltese arms. Table 1. Malta's Commercial Banks Banco di Malta Type of Note Dates in circulation Denominations scudi 1812-? 10, 20, 25, 50, 100 and 500 scudi scudi 1851-1891 5, 10, 20, 30, 40, 50, 100, 200, 250 scudi lire sterline 1851-1891 £5, £10, £20, £50 and £100 Banco Anglo Maltese scudi 18-- 10, 20, 30, 40, 50, 100, 150, 200, 250, 300 400, 500 and 1000 scudi lire sterline 1888-1891 £1, £5, £10, £20, £30 and £50 Anglo-Egyptian Banking Company, Ltd. Maltese pounds 1886-1891 10 shillings, £1, £5, £10, and £20 Malta consists of three islands: Malta, Gozo, and the one square mile Isle of Comino. Malta Under British Rule Upon being asked to intervene, Lord Nelson's fleet blockaded Malta. After a siege of two years Napoleon's forces surrendered, whereupon the Maltese acknowledged the king of Great Britain as their sovereign provided he would maintain their Roman Catholic religion. This arrangement was ratified at the Treaty of Paris in 1814. Despite having one of the deepest water ports in the Mediterranean at Valletta, Malta suffered from a decline in commerce after the Napoleonic Wars. Greater emphasis was then placed upon naval shipping due to the island's strategic location in the central Mediterranean. Soon naval, and then army, activity dominated the economy. By the 1950s over three-fourths of the population were gainfully employed directly or indirectly by the local government or armed forces. Malta became a major base for the Royal Navy during the Crimean War (1853- 1856). During World War I Malta served as an army and navy garrison and staging point for the campaigns in Gallipoli and Salonika. Postwar Malta ushered in a constitution which made English the official language and Italian the language of record. At the outbreak of World War II Malta was subjected to constant aerial bombardment , first by the Italians and then the Germans. Situated 1000 miles from the nearest British forces, the island became a vital Allied base of operations. The island was subjected to aerial attack for three years during which time it was possible to resupply the island with aviation gas and food only by submarine. Fighter aircraft for the island's defense were delivered from distant aircraft carriers. Despite all these hardships civilian morale remained high. After the war King George VI awarded the famous Cross of St. George to the entire population for their gallantry and heroism In 1947 self-government was once again granted to Malta. Disagreement as to how to manage post-war Malta led to an independence movement which, after much trial and error, prevailed. After acceptance by all parties to the new constitution in 1964, independence, within the commonwealth, was granted.. The First Official Malta Bank Note Issue The first official Malta currency was issued in August 1914, when notes in denominations of 5 shillings, 10 shillings, and one, five and ten pounds were released. They had a short life, being demonetized in the following year. The issue was necessitated by an economic depression brought about by a severe reduction in naval expenditures, the islands major source of income. Rumors of impending war caused unease by depositors for the safety of their money in the banks. Panic soon ensued, causing a run on the banks. Clearly immediate government direct action to ease the situation was called for. The banks remained closed for two weeks.